The great business journalist Connie Bruck's fascinating article in the New Yorker magazine about the fallen king of home mortgage lending, Countrywide Financial's Angelo Mozilo ("Angelo's Ashes," June 29, 2009), shows the disastrous effects of powerful leadership that was focused on the wrong objective. Bruck writes that in 2002, when Countrywide had a market share of almost 10 percent, and none of its competitors had more than 13 percent, Mozilo decided to strive for unprecedented dominance of his industry: He set a goal of capturing at least 30 percent market share. As the co-founder and strong leader of Countrywide, Mozilo's overriding goal became the laser-like focus of his people, even after Mozilo himself largely stepped away from the company's day-to-day operations. In their effort to achieve his highest values--rapid growth and market dominance--they sacrificed other values that should have been important, such as creating relationships with their customers that would be mutually beneficially for the long-run.Countrywide was one of the biggest pushers of high-risk mortgages that led to countless people losing their homes--and the financial system nearly collapsing.
In my upcoming book "Walk the Walk," I write about how a real leader must constantly show the one or two values that are most important for the company. Mozilo did exactly that. The problem is that they've got to be the right values. Any time a company is focused on growth and dominance as its No. 1 objective, then the other things that get in the way, such as ethics and prudence, will likely be sacrificed. If Mozilo had enshrined the security and prosperity of Countrywide's customers as his top value, the outcome might have been very different. Instead, he wanted market dominance at whatever price--and that's exactly what he wound up achieving.